The Financial Planning Association of Australia The Financial Planning Association of Australia

ASIC funding model

The Government has released the final Regulations for the ASIC Supervisory Cost Recovery model to recover the regulatory costs of ASIC though annual levies.

ASIC has advised the FPA of the following information:

  • ASIC intend to publish indicative levies for FY17-18 in April 2018
  • entities will need to submit a return about their operations in mid-2018 (this will be the basis of distributing the leviable costs for each sub-sector)
  • the first levy invoices to industry will be issued in January 2019, for FY17/18, and need to be paid in February 2019.

If you have specific questions for ASIC in relation to the new Industry Funding Model, please email [email protected].

Personal advice model

The final model for licensees providing tier 1 personal financial advice (section 43) includes a fixed levy component plus a graduated levy component using the following formula:

The minimum levy component is $1,500. You must add to this amount the graduated levy component based on the following formula:

Other levies may apply

It is important to remember that the application of each levy is determined by the authorisations held on your licence and the definition of each section within the Regulations. Hence, in addition to the above levy, you may also incur the following levies:

  • Insurance product distributor – will capture those authorised to ‘deal’ in general insurance, life risk insurance products or investment life insurance products (section 70)
  • Securities dealer – will capture those licensed to ‘deal’ in securities, with more than $250,000 in transactions executed on, or reported to, a large securities exchange in the financial year. (section 67)
  • MDA – will capture those who provide MDA’s including limited MDA services (section 32).

Other advice levies

If you do not provide tier 1 personal advice, or if you change your advice authorisation during the financial year, you may fall into the following advice levy sub-sectors:

  • Licensees that provide only general advice to retail or wholesale clients (section 40)
  • Licensees that provide personal advice to only wholesale clients (section 41)
  • Licensees that provide personal advice to retail clients on only products that are not relevant financial products (ie. basic products – section 42).

In our submission on the draft Regulations, we highlighted concerns about:

  • the need for a fully variable rate for the tier 1 personal financial advice levy
  • the need for a simple model
  • the impact of Government’s model on financial planners and competition within the advice market, particularly small and medium licensees
  • ultimately the need for a more equitable risk-based user-pays funding model to ensure those entities who attract regulatory activity, pay for the cost of such activity.

Read the Regulations

Read the Explanatory Memorandum

Read the FPA submission

Any questions?

We are always keen to hear your valuable feedback and suggestions. Please let us know if there are any policy issues or concerns that affect you.

Email us